(Photo: Daimler AG)

FRANKFURT, Germany German automaker Daimler AG says net profit rose 53 per cent in the third quarter, helped by stronger performance from its luxury brand Mercedes-Benz as the division benefited from strong demand for its small cars.

Net income rose to 1.90 billion euros ($2.6 billion) from 1.24 billion euros in the same period a year ago. Revenue rose 5 per cent to 30.1 billion euros.

The company on Thursday credited an expanded range of compact cars that helped boost sales. Sales for its smaller A-Class, B-Class and CLA model rose as a group by 90 per cent in the quarter to 97,200. Demand for the A-Class was so strong that the company had to farm out additional production to Finlands Valmet Automotive.

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The Mercedes division, the companys main earnings pillar, raised sales 8 per cent to a record 395,000 in the period and raised its operating earnings by 23 per cent, to 1.20 billion euros. Demand from China made a big contribution as the company sold 38 per cent more vehicles there during the quarter.

CEO Dieter Zetsche said in a statement that this shows the high investments we have made were money well spent.